We have discussed this in a previous entry (How Much Will I Get Paid? (Long Fiction)) in general terms. We have discussed that an Advance is issued by a publisher against an author’s royalties and that additional money won’t be paid out until the Advance has been Paid Out. We’ve discussed that all of this is outlined in the Contract that you signed with the publisher, which was negotiated by your agent.
In SFF one of the most recent big publishing deals with made by John Scalzi (an author) with Tor (a publisher). The publication deal Advance was for an estimated 3.14 million dollars. This is a lot of money. It is for a ten year, 13 book publishing contract. You can read about it, and some particulars on his blog HERE.
But let’s look at the math for a moment. $471,000 (15%) will likely go to his agent. Leaving a total of $2,669,000 coming to him over the course of ten years. Most professional authors budget out approximately 30% of their income to pay for taxes. For this amount, that is roughly $800,700. This will leave a total of $1,868,300 over the course of ten years for the advance sales.
But wait! There’s more (also, consider how this impacts *YOUR* advance. The numbers will be different, but the math will remain the same).
Let’s assume (this would be explained in your contract, that you signed, that your agent negociated, and your personal wealth manager is aware of) that this in-pocket total is based on each of the 13 novels in the agreement. This means that the total amount of money is broken down by thirteen, or $143,716 (ish) per title. After the taxes and the agent are paid. This is still a lot of money per book. To go even further, it is often the case that Advances are paid in installments, often times two. John Scalzi’s deal specifics are not shared, but let’s make an assumption or two, for sake of conversation.
Often, the first half of the Advance is paid upon acceptance by the publisher’s Editor. When the Editor says that the manuscript meets their editorial and publication needs. This is generally half the advance. For this example, it would be $71, 851 or so. The second half (in the same amount) would be paid upon publication. There is often nine months to a year between acceptance and publication. This is still a lot of money.
Looking at a more traditional advance, the math stays the same.
First-time novelist is, via contract (which you signed, and your agent negotiated) is $10,000 dollars. Which will be paid in two installments–in February 2016 when your final draft is accepted and in January 2017 when your novel is published.
In 2016, you will earn $5,000. Minus 15% ($750 to your agent). You will receive a check for $4,250 of which 30% ($1275) will go to taxes. You will bank $2,975 for the year of 2016
In 2017, you will repeat yourself. $5,000. Minus 15% ($750 to your agent). You will receive a check for $4,250 of which 30% ($1275) will go to taxes. You will bank $2,975 for the year of 2017. You will only begin making royalties after you have Earned Out your advance. This may take a day, this may take a hundred days, or years. No more money until you Earn Out.
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